Paul J. Bennett (2013)

Manchester, New Hampshire. practiced as Paul J. Bennett & Associates, P.C., with an office at 130 Middle Street, New Hampshire Bar in 1988. At all times relevant to this proceeding, Mr. Bennett has 1. Respondent, Paul J. Bennett, Esq., is a New Hampshire lawyer who was admitted to the

the Hearing Panel Report, by clear and convincing evidence, as follows: The Committee voted to accept the Stipulation as to the Facts dated June 4, 2013, consistent with

Hearing Panel Report. determined that the record supports a recommendation of a suspension consistent with the Sanction, Report of the Hearing Panel, and Respondent's Appeal Memorandum. The Committee Facts and Rules Violations, Attorney Discipline Office's (the"ADO") Memorandum on Notice of Charges, Answer, Hearing Panel Report, Exhibit Volumes I and II, Stipulation as to In addition to the oral arguments, the Committee reviewed the record, including the

Counsel was also present. Paul J. Bennett, Esquire, who addressed the Committee. James L. Kruse, Deputy General Attorney Discipline Office. Justin C. Shepherd, Esquire, presented on behalf of the Respondent, Elizabeth M. Murphy, Assistant Disciplinary Counsel, presented on behalf of the

Tenn. Thomas P. Connair and Martha Van Oot were absent. Heather E. Krans was recused. Alan J. Cronheim, Richard H. Darling, Elaine Holden, Richard D. Sager and Mary Elizabeth Rothstein, Chair, Benette Pizzimenti, Vice Chair, Toni M. Gray, Vice Chair, Susan R. Chollet, Argument and deliberated the above captioned matter. Members present included: David M. On August 20, 2013, the Professional Conduct Committee (the"Committee") heard Oral

Bennett, Paul J. advs. Attorney Discipline Ojjice # 11-061

Richard H. Darling* Holly B. Fazzino, Administrator Alan J. Cronheim * non attorney member Thomas P. Connair Mmy Elizabeth Tenn Susan R. Chollet* Martha Van Oot Toni M. Gray,* Vice Chair 603-224-5828 +Fax 228-9511 Richard D. Sager Benette Pizzimenti, Vice Chair Concord, New Hampshire 0330 I Heather E. Krans David M. Rothstein, Chair 4 Chenell Drive, Suite 102 Elaine Holden*

and/or retainers paid by credit card were to be deposited and then transferred promptly to as an IOLTA credit card"holding" account into which client payments of invoiced fees 8. The merchant trust account was opened by Mr. Bennett prior to the audit period to serve

account. that the account had not actually been set up as an interest-bearing IOLTA account as an IOLTA account. He learned during the course of the ADO audit Account"]. Mr. Bennett represents that he originally intended to open this Compliance Ce1iificates as"IOLTA Trust Account" or"IOLTA Trust M/C Visa Mr. Bennett's New Hampshire Supreme Court Annual Trust Accounting c. Merchant trust account [identified on checks as"IOLTA Trust Account" and on

"NH Bar Foundation Client Trust" or"Clients Trust Account."]; and Annual Trust Accounting Compliance Certificates as"IOLTA Trust Account" or Foundation Trust Account" and on Mr. Bennett's New Hampshire Supreme Court b. General client trust account, [identified on checks as"New Hampshire Bar

a. Operating account;

the following, separate accounts, at TD Bank: 7. During the period of time relevant to this proceeding, Mr. Bennett's law firm maintained

exhibits and they are incorporated herein by reference. the ADO's Exhibits 1-10, including the Audit Report. Mr. Bennett stipulates to such 6. In anticipation of trial of this disciplinary matter before a Hearing Panel, the ADO filed

of Charges on January 17,2013. Audit Repmi was issued on October 12,2012, following which the ADO issued a Notice 5. Mr. Calaman's audit covered the period January I, 2008, tlu·ough June 30, 2012. His

Calaman, CPA. Bennett also assented to an audit of his records and accounts by ADO staff auditor, Craig 4. Mr. Bennett filed voluntary resp'onses to Ms. Ross's allegations. In August 2011, Mr.

account. Ross also advised that other operating expenses were being paid out of the referenced checks drawn on an IOLTA Trust Account maintained by Mr. Bennett's law firm. Ms. from Deborah Ross, Mr. Bennett's former employee, regarding her effmis to cash payroll 3. The Attorney Discipline Office's investigation was initiated upon receipt of information

status in Massachusetts. 2. Mr. Bennett was admitted to the Massachusetts Bar in 1992. He is currently on active p. 3 Page 3 of 19

"reconcile all accounts." had fired a"substandard office bookkeeper," and that he had hired a new one to Bennett represented that it was"office policy" to conduct such reconciliations, that he during that reporting period. As to monthly reconciliations of client trust accounts, Mr. to May 2010, Mr. Bennett did not answer the question whether he had been"out of trust" 15. On his Trust Accounting Compliance Cettificate covering the repmting period June 2009

reporting periods, he had not been"out of trust." reconciliations of the client trust accounts. He also represented that for the same 2007 to May 2009, Mr. Bennett represented that his office had performed monthly 14. On his Trust Accounting Compliance Certificates covering the reporting periods June

Rule of Professional Conduct 1.15. client trust accounts were maintained in compliance with Supreme Comt Rule 50 and 13. On all of his Trust Accounting Compliance Certificates, Mr. Bennett represented that the

account as trust accounts holding client funds and subject to Supreme Coutt Rule 50. May 2011, Mr. Bennett identified the general client trust account and merchant trust 12. In the Trust Accounting Compliance Certificates covering reporting periods June 2007 to

June 2007 to May 2012. Mr. Bennett signed each of these submissions. Certificates (Trust Accounting Compliance Certificates) covering reporting periods from 11. Mr. Bennett filed New Hampshire Supreme Court Annual Trust Accounting Compliance

the circumstances and recalls that she agreed to delay presenting her checks for payment. payment of payroll checks issued to Ms. Ross. Mr. Bennett recalls advising Ms. Ross of 10. In June and July 2011, the merchant trust account had insufficient funds to cover

name as maker of the check. Mr. Bennett or by the bookkeeper who Mr. Bennett authorized to sign his (Mr. Bennett's) knowledge by checks drawn on the merchant trust account. These checks were signed by such disbursements for operating expenses and payroll were made with Mr. Bennett's Mr. Bennett was away on vacation. Thereafter, (August 20,2010, to January 7, 2012) account, signed by Mr. Bennett's bookkeeper without Mr. Bennett's knowledge while disbursements in early August 2010 were made by check drawn on the merchant trust weekly operating expenses of the law firm business, including payroll. The first two such merchant trust account was used by Mr. Bennett and his staff to pay for the daily and encumbered by the IRS, or after the operating account was closed by the bank, the 9. When there were insufficient funds in the operating account, when that account was

the general client trust account as retainers. the firm operating account as payment for invoiced services and expenses incurred, or to p. 4 Page 4 of 19 Conduct 1.15 during any of the referenced repotiing periods. trust account was maintained in compliance with Rule 50 and Rule of Professional 21. As reflected in the Audit Report, neither the merchant trust account nor the general client

knowing that no such reconciliations were done during the period 2009 to 2012. any of the reporting periods from June 2007 to May 2012. Mr. Bennett acknowledges lawyer assistants performed monthly reconciliations of the client trust accounts during 20. As reflected in the Audit Repoti, there is no evidence that either Mr. Bennett or his non­

the rules during the applicable rep01iing periods. language certifying that his client trust accounts had been maintained in compliance with Cetiificates for the reporting periods covering June 201 0 to May 2012, with the standard bookkeeping and accounting, Mr. Bennett executed the Trust Accounting Compliance Notwithstanding such knowledge and his admissions of ongoing problems with his client trust accounts were not being maintained in compliance with the rules. June 2010 to May 2012, Mr. Bemtett knew that the ADO audit had revealed that his 19. When he filed his Trust Accounting Compliance Certificates for the repotiing periods

Calaman's audit. of the client trust accounts, except to refer to work in progress in conjunction with Mr. whether he had been out oftrust and whether he had performed monthly reconciliations the June 2011 to May 2012 reporting period. Mr. Bemtett did not answer the questions neglected to include the general client trust account which was still in place and in use for account and a new merchant trust account at TD Bank in April 2012. Mr. Bemtett May 2012, Mr. Bemtett's list of client trust accounts included the original merchant trust 18. In his Trust Accounting Compliance Cetiificate for the reporting period June 2011 to

reconciliations and that he was"out of trust." made apparent during the audit, i.e., that neither he nor his staff had performed monthly Esq. (Case No. ADM-2011-0119). In that filing, Mr. Bennett acknowledged what was Supreme Couti in its order of January 23, 2012. See In the Matter of Paul J. Bennett, he agreed to the ADO audit. Mr. Betmett made the filing as later directed by the reporting period June 2010 to May 2011. It was due in August 2011, at around the time 17. Mr. Bemtett did not timely file a Trust Accounting Compliance Certificate for the

with the rules during the repotiing period. the standard language certifying that his accounts had been maintained in compliance become aware), Mr. Bemtett executed the Trust Accounting Compliance Certificate with intention to correct certain bookkeeping and accounting problems of which he had regarding the necessary change in staff to reconcile the accounts (and his apparent with Rule 50 and Rule of Professional Conduct 1.15. Notwithstanding his disclosure 20 I 0, he knew that his client trust accounts were not being maintained in compliance Trust Accounting Compliance Certificate for the repotiing period June 2009 to May 16. Mr. Bennett acknowledges that, as of August 30,2010, when he filed the referenced p. 5 Page 5 ofl9

Bennett and/or his non-lawyer assistants continued to use the original merchant trust 30. The Audit Report reveals that during the period August 6, 2010, to January 7, 2012, Mr.

operating account. account before the corresponding fees were earned and invoiced or transferred to the assistants made disbursements from the merchant trust account or the general client trust 29. The Audit Report reveals that during the audit period, Mr. Bennett and/or his non-lawyer

to Mr. Bennett's law firm were commingled. account, as reflected in the Audit Report, funds belonging to clients and funds belonging 28. To the extent earned fees were left in the merchant trust account or the general client trust

transferred to the operating account. represented monies belonging to Mr. Bennett's law firm as earned fees that had not been 27. Positive client balances in the client trust accounts, as reflected in the Audit Report, often

were earned and invoiced. general client trust account, but were not transferred to the operating account as the fees credit card or cash retainers which were deposited into the merchant trust account or the 26. During the audit period, Mr. Bennett and/or his non-lawyer assistants frequently received

the general client trust account. promptly transfer credit card payments of retainers from the merchant trust account into 25. During the audit period, Mr. Bennett and/or his non-lawyer assistants frequently failed to

monthly reconciliations regarding client funds held in client trust accounts. 24. During the audit period, neither Mr. Bennett nor his non-lawyer assistants performed

balance. whom funds were held, showing all receipts and disbursements and a running b. A separate accounting page or column for each client accurately identifying for

disbursements; or trust accounts with entries identifying the source of receipts and nature of a. A complete and accurate ledger showing all receipts and disbursements from the

identified in the referenced Trust Accounting Compliance Certificates that included: lawyer assistants maintained a trust accounting system for the client trust accounts 23. The Audit Report reflects that during the audit period, neither Mr. Bennett nor his non­

Mr. Bennett was"out of trust." 22. As reflected in the Audit Report, at various times during the referenced repmting periods, p. 6 Page 6 of 19 receive. d. To promptly return to his clients any funds which his clients are entitled to

are incurred; and in advance, to be withdrawn by Mr. Bennett only as fees are earned or expenses c. To deposit in such client trust accounts legal fees and expenses paid by the clients

specified in the Supreme Court Rules; b. To maintain financial records with respect to such client trust accounts as

accounts in accordance with Supreme Court Rules; property and to deposit client funds into one or more clearly designated trust a. To hold client propetiy separately from his own propetiy or his law firm's

and the Bar various duties, including the following: 35. Pursuant to Rule of Professional Conduct 1.15, Mr. Bennett owed his clients, the public,

clear and convincing evidence, as recommended by the Hearing Panel. lawyer Assistants; Rule 8.4(a): General Rule; and Supreme Court Rule 50: Trust Accounts, by Professional Conduct 1.15: Safeguarding Propetiy; Rule 5.3: Responsibilities Regarding Non­ The Committee voted to accept the Stipulation that Mr. Bennett violated Rule of

December 3, 2012. 34. Mr. Bennett made up the entire client trust account shotifall with personal funds paid on

the approximate amount of$5300, as ofJune 20,2012. 33. As reflected in the Audit Report, Mr. Bennett's client trust accounts were"out of trust" in

excess of money on hand. documented and clerical errors resulted in disbursements to or on behalf of clients in audit period, many transactions involving client funds were not fully or accurately 32. As reflected in the Audit Rep01i, Mr. Bennett's account records show that, during the

IRS levy and then closed by the banlc · became more frequent in the Spring of2011, after his operating account was subject to an 31. Mr. Bennett's use of the original merchant trust account to pay for operating expenses

account to cover operating expenses in the total approximate amount of $27,000. account for deposit of client credit card payments and made disbursements from that p. 7 Page 7 of 19 account to the general client trust account or to the operating account; cofailing to timely transfer credit card payments deposited in the merchant trust from his own or his law firm's funds, and otherwise to safeguard client funds, by a. Mr. Bennett failed to use his client trust accounts to hold client funds separate

follows: conduct in violation of Rule of Professional Conduct 1.15 and Supreme Court Rule 50, as 38. Mr. Bennett breached the aforementioned duties by engaging in knowing and reckless

1.15 and Supreme Court Rule 50. Compliance Certificate, shall be deemed in violation of Rule of Professional Conduct accounts and records, or who fails to file the required annual Trust Accounting requirements of Rule 50 regarding the maintenance, availability and preservation of 37. Pursuant to Supreme Court Rule 50-A(2), an attorney who fails to comply with the

required by Supreme Court Rule 50(2)F. f. Reconcile each financial institution client trust account on a monthly basis, as

50(2)C); and earned, and as to which Mr. Bennett has so informed the client (Sup. Ct. R. e. Deposit in client trust accounts only those retainer fees that are refundable if not

funds) in financial institutions (Sup. Ct. R. 50(2)B); clearly designated trust accounts (separate from Mr. Bennett's or his firm's own d. Deposit all cash prope1ty of clients received by Mr. Bennett in one or more

50(2)A); receipts and disbursements and carry a running account balance (Sup. Ct. R. page or columns for each client for whom prope1ty is held, which shall show all of the receipts and the nature of the disbursement, and (2) a separate accounting from the trust account or accounts with appropriate entries identifying the source client, to include (1) a ledger or system showing all receipts and disbursements c. Maintain records of the handling, maintenance and disposition of all funds of a

interest-bearing trust accounts for clients' funds (Sup. Ct. R. 50(l)E and 50-A(!)); b. Complete and file an annual Trust Accounting Compliance Certificate listing all

(Sup. Ct. R. 50(1)); clients' funds which are nominal in amount or to be held for a short period of time a. Create or maintain a pooled, interest-bearing trust account (IOLTA account) for

following: 36. Pursuant to Supreme Comt Rules 50 and 50-A, Mr. Bennett was required to do the p. 8 Page 8 of 19 Comi Rules; and regarding the performance of such tasks in conformity with applicable Supreme funds and client trust accounts, as well as accurate reporting to the Court keeping systems designed to ensure proper handling and maintenance of client a. He failed to make reasonable efforts to have in place at his law firm record

violation of Rule of Professional Conduct 5.3, as follows: 42. Mr. Bennett breached such duty by engaging in knowing and reckless conduct in

themselves in a manner compatible with Mr. Bennett's professional obligations. lawyer assistants employed or retained by Mr. Bennett or his law firm will conduct efforts to have measures in effect at his law fi1m providing reasonable assurance that non­ 41. Mr. Bennett owed a duty to his clients, to the public, and to the Bar to make reasonable

40. Facts as set forth above are incorporated by reference.

Rule of Professional Conduct 5.3: Responsibilities Regarding Nonlawyer Assistants

violation of Rule of Professional Conduct 1.15 and Supreme Court Rule 50. 39. Mr. Bennett's conduct in this regard constitutes clear and convincing evidence of a

period. g. Mr. Bennett allowed his client trust accounts to be out of trust during the audit

been maintained in compliance with applicable rules; and reporting periods, and recklessly misrepresented that his client trust accounts had Trust Accounting Compliance Certificates during various of the aforementioned f. Mr. Bennett failed to provide complete and accurate information requested in his

accounts, as required under Supreme Court Rule 50(2)F; e. Mr. Bennett failed to perform monthly reconciliations of each of his client trust

affecting client funds; d. Mr. Bennett failed to fully and accurately document financial transactions

disposition of client funds, as required under Supreme Comi Rule 50(2)A; c. Mr. Bennett failed to maintain records of the handling, maintenance and

earned or invoiced; b. Mr. Bennett withdrew funds from client trust accounts to pay for fees not yet

expenses; making disbursements from client trust accounts to pay for firm operating mingling earned fees with client funds in his client trust accounts; and knowingly p. 9 Page 9 of 19

has maintained a law practice known as Paul J. Bennett & Associates, at 13 0 Middle Street, Hampshire for twenty-five (25) years. During the time relevant to these proceedings, Mr. Bennett The Respondent Paul J. Bennett ("Mr. Bennett") has been a practicing attomey in New

November 2012. Depatiment of Labor; Petition for Interim Suspension, and Bank Statements dated August­ Security (tax delinquency notices); New Hampshire Judicial Council; New Hampshire Revenue Service (including tax liens for unpaid payroll taxes); New Hampshire Employment Response to Complaint; Rule 50 Certificates; ADO Audit (104 pages); Bank Records; Internal to the prosecution of this matter. These exhibit categories are described as follows: Complaint; of the Stipulation by reference. The exhibits are voluminous and cover ten different areas related including the ADO's Exhibits 1-10 incorporated in Paragraph 6 of the Stipulation and made pati analysis. It relies on the Stipulation of Facts for the summary, as well as certain exhibits The Committee briefly summarizes the facts that provide the background for the sanction

reinstatement. did the Hearing Panel, that certain conditions should be imposed in conjunction with accepts the Hearing Panel's analysis on sanction which is incorporated herein and concludes, as Bennett's Appeal Memorandum arguing that a suspension is unnecessary. The Committee request for a suspension, and it has carefully reviewed the Hearing Panel Report as well as Mr. suspended. In making this recommendation, the Committee is mindful of Disciplinary Counsel's Committee concludes that the appropriate sanction is a two year suspension with one year Having accepted the above Stipulation as to findings of fact and rulings oflaw, the

Professional Conduct 8.4(a). rules, there is necessarily clear and convincing evidence of a violation of Rule of 45. Because there exists clear and convincing evidence that Mr. Bennett violated the above

violation of Rule of Professional Conduct 5.3. 44. Mr. Bennett's conduct in this regard constitutes clear and convincing evidence of a

for such misconduct. Bennett knew or should have known of their poor performance and is wholly responsible 43. To the extent his non-lawyer assistants contributed to the foregoing misconduct, Mr.

pursuant to Supreme Court Rule 50. well as the preparation of Trust Account Compliance Ce1iificates to be filed charged with such record keeping, handling, and maintenance of such accounts, as b. He failed to employ, train, and/or properly supervise his non-lawyer assistants p. 10 Page 10 of 19 At the same time Mr. Bennett assented to an Audit, Ms. Ross filed a wage claim with the

financial books were in disarray when he fired his bookkeeper in 2010. seek assistance in bringing his accounts back into trust and into compliance after learning that his Trust Accounting Compliance Certificates he had filed were inaccurate, nor did he voluntarily lacked competence. Mr. Bennett never independently reported to the Supreme Court that the another whom he believed to be competent, and ( 4) learned that his successor bookkeeper also compliance, (2) learned that his bookkeeper was incompetent, (3) replaced his bookkeeper with which (1) he believed, but did not independently verify, his bookkeeper's confirmation of In terms of his knowledge of the situation, Mr. Bennett went through various phases in

enclosed ...."See ADO Exhibit ("Exh.") 3, pp. 41-42 and Stipulation of Facts, ~~15-16. Bookkeeper. This situation has resulted in the late filing of the documents and payments dated August 30, 2010, he states that"unfortunately I had no choice but to terminate my disorganized. Have hired new bookkeeper to reconcile all accounts." In an accompanying letter responded that he"Just laid off previous bookkeeper. Work was very substandard & addressing the question about whether he had been"out of trust" during the repmting period, he period 2009-2010, Mr. Bennett made no representation as to whether he was out oftrust. In In his Trust Accounting Compliance Certificate, dated August 30,2010, covering the

"out of trust" during the relevant time period. instance Mr. Bennett filed a cettificate, but he failed to answer whether his accounts had been Mr. Bennett failed to timely file a Trust Accounting Compliance Certificate, and in another compliance with Rule 50 as well as Rule of Professional Conduct 1.15. In at least one instance, Cettificates pursuant to Supreme Court Rule 50, all of which represented that he was in During this same period, Mr. Bennett submitted several Trust Accounting Compliance

various accounts to endure actual compliance with his professional obligations. for the payment of operating expenses, been"out of trust" and chronically failed to reconcile his in which Mr. Bennett had commingled client and law firm funds, utilized his IOLTA accounts which covered the period January 1, 2008 through June 30,2012, revealed a number of instances On August 4, 2011, Mr. Bennett assented to an audit of his financial records. The audit,

checks date back to the weeks of June 25, 2011 to July 9, 2011. IOLT A Trust Account for operating expenses, including payroll checks issued to Ms. Ross. The information to the ADO that raised concerns about Mr. Bennett's use of funds in his firm's pay her wages in a timely manner, and she contacted the ADO about the situation. She provided in the financial aspects of the Bennett law firm, was laid off from her job. Mr. Bennett failed to On or about July 9, 2011, Deborah Ross ("Ms. Ross"), a paralegal who was not involved

circumstances where the Public Defender Program is unavailable. entered into Agreements with the Judicial Council as a contract attorney to represent indigents in 1992. A substantial pmtion of his practice involved criminal defense work, and he routinely Manchester, New Hampshire. Mr. Bennett has been a member of the Massachusetts Bar since p. 11 Page 11 of 19

tax periods and released on 8/10/2011. See ADO Exh. 5, p.195; Exh. 7, p. 187.) with the Judicial Council. (Levy for 941 taxes, dated 5/18/2011 for 03/31/2010 and 06/30/2010 money owed to his office by the State of New Hampshire under an indigent defense contract In the same letter, Mr. Bennett acknowledged that there had been an IRS levy to attach

Exh. 8, p. 317. of seeking legal representation against Ms. Ross for her false complaints. ADO damage to this office as a result of her false complaint. This office is in the process Professional Conduct Committee.. . Moreover, she has now caused serious As a direct result of the claim she filed, this office is being investigated by the

inaccurate statements. The letter provides in pati as follows: Depatiment of Labor dated August 25,2011, he accused Ms. Ross of making false and manner inconsistent with his statements of full acceptance of responsibility. In a letter to the Nonetheless, Mr. Bennett responded to the wage claim in the Department of Labor in a

from day one. He didn't hide the ball..," 1d. at p. 35, lines 10-15. See Hearing Transcript, p. 19, lines 8-23. It is Mr. Bennett's position that he was"cooperative Stipulation of Facts as recognition of his mistakes, including inegularities in his IOLTA account. lines 2-9. His counsel asked that he be given credit for his cooperation and points to the known to him. See Respondent's Appeal Memorandum p. 4; Sanction Hearing Transcript, p. 25, acts and omissions of his staff and claims he has not disputed what was known and what was not At the Oral Argument before the Committee, Mr. Bennett took full responsibility for the

blame for the financial mismanagement of his firm on the ineptitude of two bookkeepers. Committee Sanction Hearing Transcript, June 4, 2013 p. 26, lines 14-18. Mr. Bennett places the been cooperative with the ADO and has taken full responsibility for his actions. See Hearing manage his law practice in a more efficient and protective manner. Mr. Bennett claims he has Mr. Bennett claims that although he was"grossly negligent" and"reckless", he has taken steps to At both the Sanction Hearing before the Hearing Panel and in his Appeal Memorandum,

would reissue them. As of this date, I have not received the above checks. On 7/29 A tty Bennett stopped payment on these checks and texted me that he per week@ $20 per hour= $800 gross= $673.80 net x 3weeks = $$2,021.40. wle 6/25, 7/2 and 7/9/11 from Bank ofNH IOLTA Trust Acct #xxxxxxx @40 hours was had [sic] the following payroll checks issued to me #337, #339 and #343 for I was laid off from Attorney Bennett'sfirm due to financial issues. As of7111111 I

Depatiment of Labor. See, ADO Exh. 8, p. 312. Her wage claim stated in pertinent part: p. 12 Page 12 of 19 Morgan's Case, 143 N.H. 475,477 (1999). the particular rules violated, but is determined largely with reference to the attorney's behavior." gravity of unprofessional conduct is not determined solely by the number of rules broken or by severity of the misconduct and any mitigating circumstances appearing in the record."The judges each attorney discipline case on its own facts and circumstances, taking into account the similar conduct in the future." Conner's Case, 158 N.H. 299, 303 (2009). The Committee public confidence in the bar, preserving the integrity of the legal profession, and preventing The purpose of the Comt' s disciplinary power is"protecting the public, maintaining

procedures. ADO Exh. 9, p. 472. March 2013 that Mr. Bennett was using a manual system that provides the appropriate that the client trust accounts were effectively in compliance with Rule 50. Mr. Stone reported in compliance issues continued through the end of October 2012, and it was not until January 2013 accounting systems, and accounting procedures in his office. According to Mr. Stone, the non­ services of Dennis Stone, CPA, to perform a comprehensive review of the financial records, February 1, 2013, the parties entered into an agreement whereby Mr. Bennett agreed to retain the in which he denied the allegations that he commingled client funds with the firm's funds. On Bennett) in November 2012. Mr. Bennett filed an Answer and Objection on December 26,2012, Interim Suspension with the Supreme Court (Case No. LD-2012-0014, In The Matter ofPaul J. accounting supervision after the complaint was filed in July 2011. The ADO filed a Motion for Mr. Bennett continued to practice law and handle client funds without qualified

p. 18. concerning my utilizing an JOLT A account, as has been stated, be dismissed ..." ADO Exh. 2, in proper order. I would request though, that any complaints that have been lodged against me that he has"no objection to the completion of the audit and demonstration that the accounts are response concerning the allegations pending against him. He concludes the letter by confirming On May 21,2012 Mr. Bennett wrote to Acting General Counsel with a supplemental

and Supreme Court Rule 50. recklessly with regard to his obligations under the above-cited Rules of Professional Conduct accepted responsibility for his actions as well as his stipulation that he acted knowingly or Memorandum, p. 5. These statements are inconsistent with Mr. Bennett's claim that he has independently ensuring that the books were being kept pursuant to Rule 50 et. a!." Appeal "poor judgment in his choice of bookkeepers and poor oversight of his bookkeepers and not In his Appeal Memorandum, Mr. Bennett states that the ADO complaint concerns his

8, pp. 327-328. Ms. Ross for the tens of thousands of dollars her willful actions have cost this firm." ADO Exh. complaint. Mr. Bennett reiterates that his office is"still exploring a separate civil action against financial crisis. He characterized her allegations to the ADO as a malicious filing of a false In another letter dated September 12,2011, Mr. Bennett blames Ms. Ross for his office's p. 13 Page 13 of 19

Public Censure. 1 Section 4.13 uses the term"Reprimand." The most analogous sanction in New Hampshire is a

4.14 Admonition is generally appropriate when a lawyer is negligent in

client. dealing with client property and causes injury or potential injury to a 4.13 Reprimand1 is generally appropriate when a lawyer is negligent in injury or potential injury to a client. know that he is dealing improperly with client property and causes 4.12 Suspension is generally appropriate when a lawyer knows or should

prope1iy and causes injury or potential injury to a client. 4.11 Disbarment is generally appropriate when a lawyer knowingly conve1is client

pertinent part, as follows: duty to protect the interests and prope1iy of his clients. Section 4.1 of the Standards provides, in Bem1ett's failure to properly maintain the client trust account involved breaches of Mr. Bem1ett's The Standards provide material guidance for determining a baseline sanction. Mr.

Section 4; and (2) violations of duties owed to the profession under Section 7. Here, the misconduct involves: (1) failure to safeguard client's prope1iy under Standards

N.H. 155, 160 (2005)). greater than the sanction for the most serious misconduct." Id. (citing Richmond's Case, 152 instance of misconduct among a number of violations; it might well be and generally should be the sanction imposed"should at least be consistent with the sanction for the most serious ultimate sanction"). In the case of multiple charges of misconduct, the ABA recommends that the sanction, [the Comi] consider[s] the effect of any aggravating or mitigating factors on the factors and whether they affect the baseline sanction. See id. (stating that"[a]fter determining looks to the fourth and final part of the analysis: the existence of any aggravating or mitigating identify the appropriate sanction"). Once the baseline sanction is determined, the Court then that"(i]n applying these factors, the first step is to categorize the Respondent's misconduct and misconduct and determining a baseline sanction. See Conner's Case, 158 N.H. at 303 (stating The first three parts of the analysis create the framework for characterizing the

mitigating factors." Id. (quoting Douglas' Case, 156 N.H. 613, 621 (2007)); Standards§ 3.0. actual injury caused by the lawyer's misconduct; and (d) the existence of aggravating or imposing sanctions:"(a) the duty violated; (b) the lawyer's mental state; (c) the potential or Case, 158 N.H. at 303. The Standards set forth a four part analysis for coutis to consider in Imposing Lawyer Sanctions (2005) ("Standards"), it looks to them for guidance. Conner's Although the Court has not adopted the American Bar Association's Standards for p. 14 Page 14 of 19 that his financial records were in need of attention. Hearing Panel Transcript, p. 22, lines 1-14. acknowledged that he knew as early as 2010, when he fired the first incompetent bookkeeper, period of time to evaluate or even consider the risks associated with his clients' funds. He client's property was improper. Mr. Bennett showed a total disinclination over a substantial funds. See Stipulation, ~'1[16 & 38. He should have known that his financial management of his mismanagement of his firm's finances and the implications of his duties to safeguard his client's The Committee accepts the Stipulation that Mr. Bennett knew about the financial

taxes and notices from New Hampshire Employment Security regarding tax delinquencies. numerous notices from the IRS regarding tax liens and levies regarding unpaid federal payroll indifference to the risks associated with delegating responsibility to his bookkeeper even after basic law office accounting procedures and oversight of his firm's finances. He exhibited gross Mr. Bennett's breaches were fundamental, showing a lack of understanding of the most

negligent in failing to establish proper accounting procedures should be suspended"). Standards, §4.12 (emphasis added); Commentary, §§4.12 and 4.13 ("lawyers who are grossly a lawyer who"knows or should know that he is dealing improperly with client property ...." negligent state of mind is the same as that contemplated in §4.12, recommending suspension for Bennett's conduct was, at a minimum, reckless. Under the Standards, a reckless or grossly Report, p. 6. The Committee, in accord with the Hearing Panel and the Stipulation, finds that Mr. The Hearing Panel found that Mr. Bennett engaged in reckless conduct. Hearing Panel

violation Rule of Professional Conduct 5.3, as follows: ..." (Emphasis added). "42. Mr. Bennett breached such duty by engaging in knowing and reckless conduct in

Rule 50 as follows: ..." reckless conduct in violation of Rule of Professional Conduct 1.15 and Supreme Court "38. Mr. Bennett breached the aforementioned duties by engaging in knowing and

Stipulation of Rules Violations states that: his conduct was grossly negligent and reckless. Hearing Panel Transcript, p. 26, line 14. The Under the second prong of the analysis, Mr. Bennett admitted to the Hearing Panel that

with Mr. Bennett's professional obligations. lawyer staff to ensure proper maintenance and handling of client funds in a manner consistent on the maintenance and handling of client trust accounts, and to train and supervise his non­ as to the Coutt. He failed to properly safeguard client funds, to properly account for and repot1 Under the first prong of the analysis, Mr. Bennett violated his duty to his clients as well

the more serious misconduct. The Committee focuses on Section 4 as the failure to preserve client's property involves

injury to a client. dealing with client propetty and causes little or no actual or potential p. 15 Page 15 of 19

client funds, we often take severe disciplinary action," and"[a]lawyer's obligation to refrain The Supreme Comi has emphasized that"[i]n cases involving an attorney's misuse of

eliminate ...." In re Bizar, 97 Ill. 2d 127, 454 N.E. 2d 271 (1983). attorney's possession, not only the actual loss, which the rule is designed to the Illinois Supreme Court"It is the risk of loss of the funds while they are in the appropriate even in cases when the client does not suffer a loss. As explained by creditors, commingling is a serious violation for which a period of suspension is commingle client's funds with their own subject the client's funds to the claims of with their own, or fail to remit client funds promptly ... Because lawyers who The most common cases involve lawyers who commingle client funds

Commentary, Standards, § 4.12 addresses the suspension sanction as follows:

7. The firm was out oftrust as of June 30, 2012. 6. Operating expenses of the firm were taken directly from the trust account; and seemingly umelated to client activity; 5. Funds were transferred from client trust accounts without identification and removed from trust accounts; 4. Firm funds were commingled with client funds in that earned fees were not retainer funds; 3. Misleading information was provided to clients regarding the handling of 2. Funds were removed from trust accounts prior to being earned; 1. Records were not maintained in accordance with Supreme Court Rule 50;

According to Mr. Calaman's Audit Repmi, the following deficiencies were observed:

best case for mitigation; while those who make it later in the proceedings have a weaker case). upon the lawyer's own initiative prior to the initiation of disciplinary proceedings present the was issued on November 15,2012. See Commentary, Standards, Sect. 9.3 (restitution made State. ADO Exh. 8, p. 333. In addition the payment was only made after a Notice of Charges claims that her unemployment benefits were delayed as a result of insufficient records with the disregarded his responsibility to his employees by failing to timely pay payroll taxes. Ms. Ross possible claims against Mr. Bennett or his firm. See Commentary, Standards, sect. 4.12. He also harm by commingling client funds with his own, thereby subjecting his clients' prope1iy to reputation oflawyers and the integrity of the profession, Mr. Bennett caused significant potential 20, 2012, does not mitigate the occurrence of those losses. Aside from potential harm to the January 2012. His belated action at the end of2012 to make up the shortfall calculated as of June the audit period and operated his firm out of the merchant trust account from August 201 0 to is significant." Hearing Panel Report, at p. 6. Mr. Bennett was out of trust at various times during record contains no evidence that any client suffered actual harm, the magnitude of potential harm by Mr. Bennett's misconduct. We agree with the Hearing Panel's conclusion that"[w]hile the The third prong of the analysis requires consideration of actual or potential injury caused p. 16 Page 16 of 19 Supreme Court began looking to the Standards for guidance. 2 There is no reference in the case to the Standards. The case was decided in 1999 prior to the time that the N.H.

(2002). a professional duty to cooperate with the PCC investigation ...." Feld's Case, 149 N.H. 19,29 with the investigation, while noted, is not ascribed significant mitigating weight as"a lawyer has Stipulation, and has no prior disciplinary record of note. The fact that Mr. Bennett cooperated Morgan's Case, Mr. Bennett, like Morgan, cooperated with the ADO from the audit through the Mr. Bennett's case is similar to and distinguishable from these cases. Turning first to

that suspension in abeyance. I d. accepted the Committee's recommendation of a two year suspension and did not hold any pati of attorney also had very little experience and suffered fi·om mental illness. ld. at 71-72. The court prompt corrective measures, and, in particular, ignored the disciplinary process entirely. The virtually no injury to any client. Id. He did, however, avoid the problem rather than to take attorney did not knowingly or intentionally misuse client funds and his conduct resulted in account and without client authorization and commingled earned and unearned legal fees. The Coddington's Case concerned an attorney who withdrew client funds from his trust

the facts and violations alleged, and the absence of a prior disciplinary record. ld. at 377-78. upon discovery of the problem, cooperation with the disciplinary process including stipulation to to take corrective measures to prevent actual harm, lack of dishonesty, voluntary self-reporting "mitigating" factors that included acceptance of responsibility for his actions, good faith efforts accepted the two year suspension recommendation, but held the suspension in abeyance based on justified the Committee's recommendation of a two year suspension. I d. at 477. The Court Court observed that the attorney had committed"serious infractions" of the applicable rules that proper records and to report discrepancies in his Trust Account Compliance Cetiificates. The unearned client deposits, paid various expenditures from the account and failed to maintain concerned an attorney who maintained a client trust account in which he commingled earned and Mr. Bennett's case falls between two Supreme Court decisions. The first, Morgan's Case,2 Regarding issue of the duration of the suspension, we agree with the Hearing Panel that

sanction of suspension. the context of the parties' agreement as to the facts, compels the Committee to recommend a known that he or she dealt improperly with client property. ld. This guidance, when viewed in to safeguard client property that it is enough to merit suspension that the attorney should have similar conduct in the future." Morgan's Case, 143 N.H. at 477. So serious is an attorney's duty maintain public confidence in the bar, preserve the integrity of the legal profession and prevent an attorney from the sanction of suspension, not to punish the attorney, but"to protect the public, 4 77 (1999). In the realm of misuse of client funds, the lack of malicious intent does not relieve funds. See, e.g., Coddington's Case, 155 N.H. 66,71 (2007); Morgan's Case, 143 N.H. 475, not have acted intentionally, the Court has imposed suspension as a sanction for misuse of client Douglas' Case, 147 N.H. 538, 544 (2002). Even in instances in which the attorney at issue may from misuse of a client's property must stand among the most insistent of professional norms." p. 17 Page 17 of 19

management systems; B. Implementation of procedures to employ and train staff to assist in office

with applicable rules, including Supreme Comi Rule 50; designed to ensure that all accounts are handled and maintained in compliance to assist him in the implementation of bookkeeping and accounting systems A. Retaining at his expense the services of financial and office practices consultants

following conditions: establishes within a reasonable time before he seeks reinstatement that he has complied with the final. The second year of the suspension is stayed and will not go into effect if Mr. Bennett shall run beginning thirty (30) days after the date the order of the N.H. Supreme Court becomes Bennett be suspended from the practice of law for two years. The first year of the suspension and the purposes of attorney discipline in New Hampshire, the Committee recommends that Mr. Accordingly, taking into consideration the four-pmi analysis set fotih in the Standards

conditions set forth below. Hearing Panel's recommendation of a two-year suspension with one year stayed on the misconduct. It has considered the mitigating and aggravating factors and agrees with the The Committee concludes that suspension is the appropriate sanction for Mr. Bennett's

Mr. Coddington had ignored his failings for a lengthy period. Mr. Bennett's misconduct extended over a substantial period of time, there is no indication that Coddington and the record lacks any explanation, such as mental illness, for his conduct. While ADO and the disciplinary process. However, Mr. Bennett has far more experience than did Turning next to Coddington's Case, unlike Coddington, Mr. Bennett cooperated with the

20 1 0, Mr. Bennett turned a blind eye to his financial mismanagement. become accustomed over a substantial period of time. Although he became aware of problems in report by Ms. Ross, Mr. Bennett might still be operating his firm in the manner to which he had acknowledged to the Department of Labor that he brought the problems on himself. But for the pay his staff. In addition, Mr. Bennett blamed the staff for his financial difficulties, and never accounting systems and other mismanagement of client funds only came to light after he failed to Unlike Morgan, Mr. Bennett did not self-report. The failure to maintain proper

and 06/30/2010 tax periods and released on 8/10/2011; see ADO Exh. 5, p.195; Exh. 7, p. 187.). defense contract with the Judicial Council. (Levy for 941 taxes, dated 5/18/2011 for 03/31/2010 an IRS levy to attach money owed to his office by the State ofNew Hampshire under an indigent the IRS. This is especially significant given that Mr. Bennett acknowledged that there had been was a risk that the client's funds would be subjected to claims of creditors - including claims of substantial mitigating weight. Moreover, even if there was no actual harm to any client, there and after the Notice of Charges was filed. Accordingly, the Committee does not assign it his own funds. However, this was done more than a year after the investigation and audit began As in Morgan's Case, Mr. Bennett supplemented the shortfall in the trust account with p. 18 Page 18 of19

Office's collection eff01is. Mr. Bennett shall be responsible for all costs incurred as a result of the Attorney Discipline legally available post-judgment enforcement remedies and procedures. See Sup. Ct. R. 37(19)(c). county in the state, where it shall be docketed as a final judgment and shall be subject to all The Committee may file a copy of the final assessment with the superior comi in any

assessment by petition to the superior court in any county in the state. Sup. Ct. R. 37(19)(b). disagreement. Sup. Ct. R. 37(19)(b ). The Committee may resolve the matter, or enforce the Committee's statement of expenses, listing each disputed expense and explaining the reasons for final unless Mr. Bennett responds in writing, within thirty (30) days of receipt of the stenographers, transcripts, copying, inventory and audit expenses. The assessment shall become disciplinary matter. See Sup. Ct. R. 37(19)(b). Costs can include, but are not limited to: mileage, pay the expenses incu!1'ed by the Committee in the investigation and enforcement of this The Professional Conduct Committee accepts the Stipulation that Mr. Bennett agrees to

suspension terminated. the date of reinstatement, Mr. Bennett may petition the Committee to have the conditional clear and convincing evidence) why the suspension should not be imposed. After one year from the foregoing conditions, he should be required to show cause (bearing the burden of proof by reinstated and until terminated by the Committee. Should Mr. Bennett fail to comply with any of The above conditions shall remain in effect for one year after Mr. Bennett is

expenses as set forth in the costs assessment outlined below. F. Reimbursement of, or establishment of a plan to reimburse the Committee for all

Rule 37(14), and E. Compliance with all requirements for reinstatement set f01ih in Supreme Court

staff auditor with the costs of such audits to be paid by Mr. Bennett; system of his practice's financial management and agrees to random audits by the D. Entering into a written agreement with the ADO regarding a quarterly reporting

accounts; client billing procedures, including monthly reconciliations of client trust C. Becoming familiar with, regularly monitoring of and approving accounting and p. 19 Page 19 of 19

File Justin C. Shepherd, Esquire Elizabeth L. Murphy, Assistant Disciplinary Counsel Distribution:

October _, I(, 2013

suspension of Paul J. Bennett with the second year stayed for one year. Disciplinary Counsel to file a petition in the New Hampshire Supreme Court for a two year For all of the above reasons, the Professional Conduct Committee directs Assistant